Supply Chain Strategy and S&OP
Developing a supply chain strategy supporting the company’s objectives is a prerequisite for effective S&OP. This article discusses how to create an effective supply chain strategy by defining the company’s competitive strategy, identifying Critical Success Factors (CSF), and defining Service Level Agreements (SLA).
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Effective Supply Chain management is essential for companies to remain competitive and profitable in today’s fast-paced and dynamic business environment. A key element of successful supply chain management is to develop and implement supply chain strategies that align with the company’s overall objectives. A well-defined Supply Chain Strategy is a prerequisite for effective Sales and Operations Planning (S&OP). The Supply Chain Strategy sets the direction and boundaries for the S&OP process, enabling cross-functional collaboration and alignment with the company’s overall objectives.
The S&OP process is essential to foster collaboration within a company, balance supply and demand, and align the company’s different functions with the corporate strategy. However, in many companies — even mature ones –S&OP doesn’t deliver on its promises because of a fundamental misalignment between different functions. Indeed, sales and operations often look at the same problem from different angles and do not agree, causing a misalignment in understanding the corporate strategy.
Supply Chain Strategy
The Supply Chain Strategy is a guiding framework for making supply chain decisions and prioritizing initiatives to achieve the company’s objectives. It encompasses decisions related to sourcing, manufacturing, distribution, inventory management, and customer service.
A good starting point for developing a Supply Chain Strategy is to analyze the company’s competitive strategy. This involves understanding why customers choose a company over its competitors and what the company can do to maintain that competitive advantage.
